Despite a call by U.S. President Donald Trump to cut drug price, there are no concerns about the outlook for an Exchange Traded Fund (ETF) that is listed on the local main board to track the U.S. biotech index, according to market analysts.
In a news conference held Jan. 11, days before Trump was sworn in, he vowed to change the way that drugs are reimbursed in the U.S. market to rein in drug prices, remarks that sent ripples through the NASDAQ Biotechnology Index (NBI), although the fundamentals of the index remained sound, the analysts added.
Chang Ching-hui, manager of the Capital NBI Index ETF, which was issued by Taipei-based Capital Investment Trust Corp. in January to track the NBI Index, said that the latest volatility in the index, pushing down share prices of many biotech, medical services providers and even medical equipment makers on Wall Street, simply due to Trump’s comments, is not expected to change an uptrend in the index.
Chang said she remained upbeat about the movement of the Capital NBI Index ETF and other similar ETFs, despite Trump’s vow to lower drug prices. The NBI is the index made up of NASDAQ-listed companies classified as either biotechnology or pharmaceuticals.
According to Chang, since the beginning of this year, many constituents in the NBI have announced efforts to develop new drugs ahead of schedule, and market analysts have raised their recommendations for these stocks.
Chang said that investors are advised to pour funds into the Capital NBI Index ETF and other similar ETFs to take advantage of the upturn of the NBI on Wall Street.
The analyst said that the global biotech industry has benefited from an increase in an aging population that is boosting medical services expenses, while the industry has been riding the wave of the debuts of new medical treatments to rake in more profit.
Echoing Chang, the TWSE said that the constituents of the NBI have posted stable growth and have been good at risk control, adding that many small-sized biotech stocks on the NBI have devoted themselves to new drug development and have been targeted by their larger counterparts in acquisitions.
The TWSE sad that the NBI covers a wide range of biotech businesses such as cancer and tumor treatment, immune system improvements and cardiovascular disease treatment, while many of the index’s components generate handsome sales and remain liquid.
The exchange said that as the NBI is one of the most important indexes in the global market following biotech stocks, the launch of the Capital NBI Index ETF has become a channel for investors here who are eyeing biotech stocks on Wall Street.
Capital Capital Investment Trust said that investors are encouraged to put the Capital NBI Index ETF into their investment portfolios